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Republicans Kill Detroit Rescue in Senate

A
plan to provide bridge loans to the Big Three auto manufacturers died last
night in the US Senate, taking with it many remaining hopes for saving millions
of American auto jobs

Republican
Senators insisted on draconian wage concessions by the United Auto Workers as
the price of any loan package— and wanted them enshrined in new contracts by
March.These terms would have
eliminated all remaining gains left from decades of collective bargaining by
the auto union.The Republicans
demanded total wage parity with nonunion workers employed at foreign auto
factories located in their home states.The anti-union stance of the Republicans and the UAW’s refusal, after
making numerous concessions, to agree to their demands produced the death of a
legislative deal to enact bridge loans before the Christmas holiday.

Now,
the only available cash to keep Detroit running lies in the hands of
the Bush Administration, which has so far been unwilling to provide it from the
Treasury funds allocated earlier this fall to save the financial system.It looks like General Motors could go
bankrupt sometime before the beginning of January without a bridge loan and
Chrysler is also in imminent trouble.The parts manufacturers, which rely on all three Detroit automakers,
would go down as well.Ford, in
need of parts and other supporting auto businesses, would be next, along with
the closing of foreign auto plants in the South.

There’s
some hope that GM and Chrysler could hang on until the new Democratic Congress
and Senate convenes in early January, if the Bush Administration fails to spring loans out of an unwilling Treasury Department.But it's difficult to predict
whether the auto dominoes will fall before help arrives. This is a crucial moment in the American
economic crisis— and in the history of American labor.If the Big Three begin to fail, it will
be very likely that the pieces of the industry’s interlocking puzzle will come
apart extremely rapidly.

If,
on the other hand, there is sufficient government help and Detroit survives the
current crisis, the coming changes in “card check” legislation will probably
result in a huge labor power shift.The likelihood of unionization of southern auto plants run by foreign
companies would increase enormously under the new legislation.The hardball being played between the
Southern Republicans and northern union labor would take a rapid turn.Wages would remain low for the
foreseeable future in the collapsed economy, but once conditions improved, the
percentage of the workforce represented by unions would be far greater.

Meanwhile,
the American economy, or what’s left of it, hangs in the balance.

****

NOTE— It’s
worth remembering that none of the current talk about cutting wages for workers was
brought up during the bank bailout debate.The real issuefor rescue critics seems to be whether an industry’s workers are
unionized or not.Since the
difference in auto prices attributable to labor costs— between the
Japanese auto companies and the American companies— is only about $800 per car, labor costs clearly aren’t critical to American corporate
competitiveness.Yet, they were the
main issue for most key Republicans in the Senate, whose power base relies on
keeping the auto plants in their home states nonunion.

There’s also a factual disconnect about hourly labor
rates discussed during the Senate debate. Several Senators have used a
figure of $73 per hour to describe UAW labor rates. The actual UAW rates vary,
from $14 per hour for new workers at the Big Three to $33 per hour for skilled
trades workers. The Republican $73 per hour figure includes not only adding in benefits, but
also adding a hefty additional total of ALL current retirees benefits from contracts
of years gone by, divided by the number of current workers (a much smaller
workforce). Somehow, this figure made it seem as if current workers were
rolling in clover at a huge hourly salary— which none of them are actually
drawing.

Comments

I think the Republican senators probably wanted the talk with the UAW to fail--no time like the present to engage in union busting. If the top 1% in this country (who own Congress, anyway) had their way, we would all be reduced to the slave status of sweatshop workers in China.

I think the Republican senators probably wanted the talk with the UAW to fail--no time like the present to engage in union busting. If the top 1% in this country (who own Congress, anyway) had their way, we would all be reduced to the slave status of sweatshop workers in China.